COVID Continues to Impact GDP, but Progress on Medical Front

Analysis

On a quarterly basis, gross domestic product is expected to grow at a record high, but the performance of the Hungarian economy may still lag behind 2019 by 4.8–6.2%, due to the onset of the second wave of the coronavirus, says economic daily Világgazdaság.

Based on the data known so far, GDP may have shrunk by 6% in the third quarter of this year compared to the same period of the previous year, said Dávid Németh, senior analyst at K&H Bank.

Minister of Finance Mihály Varga presented his ministry’s weekly economic index at the 58th traveling meeting of the Hungarian Economic Association at the end of September, which showed a lower annual decline of 4.8%.  

The September Purchasing Managers’ Index was slightly above 50 points in July and August, but fell to 48.8 points in September as a result of the second wave of epidemic.

Economic research institute GKI forecasts Hungary’s GDP will decline 7% this year and predicts the country’s economy will only fully recover from the coronavirus crisis in 2022, according to state news agency MTI.

Economic research company Kopint-Tárki forecasts a 5.8% drop in GDP this year, according to CEO Éva Palócz. The International Monetary Fund (IMF) has increased its projection for the amount Hungary’s economy will contract to 6.1% this year in its latest World Economic Outlook.

PCR Testing

According to an official decree, the government has allocated a total of HUF 14 billion in the central budget for the National Public Health Center to perform polymerase chain reaction (PCR) tests. With the price of a test set at about HUF 19,500, the funding is enough to perform 728,000 tests. As of October 1, this means just over 8,000 tests a day.

Currently, roughly 11,000-13,000 tests are performed daily, but the data shows that this is not enough. According to the World Health Organization (WHO), enough tests should be performed to keep the rate of positive results below 5%. In Hungary, however, this rate has been higher since mid-September, above 10%, according to recent data.

Semmelweis University (SE) has been involved in testing a new diagnostic procedure, a one-step PCR test that detects coronavirus faster and easier, the medical university announced in a statement. Barna Vásárhelyi, director of the Institute of Laboratory Medicine at SE, said that classical PCR testing is based on ribonucleic acid (RNA) detection of virus extracted from a sample.

That involves a time-consuming, costly process that requires several hours, a reagent, and a dedicated professional. The new PCR tests that don’t require RNA samples are ready for mass production, the deputy head of SE, Attila Szabó told Kossuth Rádió. By cutting out the RNA step, which takes at least six hours, the time to process the test takes about two hours only, Szabó said. The scale of availability of the tests will depend on the producer, he added.

Meanwhile, mass production of remdesivir and favipiravir, two drugs being used around the world to treat COVID-19 patients, has started in Hungary, according to the Ministry of Innovation and Technology.

The government has financed production capacity for remdesivir at Gedeon Richter and the pharmaceutical company will deliver the antiviral drug to the state. Richter has enough remdesivir in stock to treat about 250 COVID-19 patients, but it will produce enough for more than 800 patients by the end of October.

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